RBL sells ₹800-crore stressed credit card loans to Kotak Bank
RBL Bank last week offloaded almost ₹800 crore of its credit card portfolio at a steep discount to another private sector lender, Kotak Mahindra Bank, said people with direct knowledge of the matter.
Credit card repayment delays account for about one-fifth of the total gross non-performing assets (NPA) of RBL Bank, which is seeking to clean up its books after a change of guard at the private lender that lost more than 50% in its market capitalisation over the past five years.
Of the RBL Bank's ₹2,441-crore gross NPA, credit card dues total ₹462 crore, as of September 30, 2023, according to the quarterly investor presentation.
The ₹793-crore portfolio sold by RBL is a mix of credit card outstandings as non-performing assets and written-off card dues, said one of the persons cited above.
Kotak Mahindra Bank acquired the credit card portfolio for ₹20 crore in an all-cash deal, which equates to a recovery of 2.5% for RBL Bank, the same person said.
RBL Bank and Kotak Mahindra Bank did not respond to ET's requests for comments until Tuesday press time.
Once the portfolio is transferred to Kotak Mahindra Bank, the credit card customers will be intimated about the transfer.
The acquiring bank will reach out to these customers to recover the outstanding dues.
Credit card loans, 42% of RBL Bank's retail loan book, have grown rapidly in the last two years.
It constitutes ₹18,572 crore as of September 30, 2023, against ₹12,482 crore at the end of September 2021.
This is also seen as RBL's attempt to clean the unsecured loan book, which is as high as one-third of the bank's total loan book. Credit card loans are part of the bank's unsecured loan book.
In its rating report released in August last year, ICRA said that RBL
